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To Legislators, From Former Representative and State Senator Walt McNutt

February 13, 2015 by State Senator Walt McNutt

Dear Members of the Legislature –

I am writing to provide a bit of historical legislative perspective on the CSKT water compact based on my experiences as a State Senator and State Representative. I served in the Montana Legislature, first in the Senate from 1997-2004, then in the House from 2005-2011. I spent a significant amount of time on water issues – most specifically water adjudication.

In 2005, after two years of interim study by the Legislative EQC, I carried HB 22 – often referred to as the “water tax” bill. The entire purpose of this bill was to provide adequate funding for Montana’s water adjudication. At that time, the process had taken over 30 years and there remained over 50,000 claims to be examined by the DNRC and entered into enforceable decrees in the MT Water Court.

HB 22 required each water right owner to pay a fee that was deposited into the Water Adjudication Account. The funds in that account can only be used for adjudication activities. In 2005, it was estimated that $32 million was needed to get all of Montana’s basins into enforceable decrees . In the 2007 session, the legislature repealed the fee requirements of HB 22 and transferred $25 Million from the General Fund into the Water Adjudication Account. It turns out we underestimated the cost of completing enforceable decrees in all of Montana’s basins. The adjudication program is currently seeking additional funds to complete the last 7 basins. It will take an additional $14.6 Million to finally complete this incredibly important process.

I raise these points so that you, as current legislators, can fully understand the significant cost and the extensive thought and work that your predecessors committed to the Montana statewide water adjudication. Completion of the adjudication is critical to the protection of Montanan water users from claims against our water from downstream states and others.

One element of the CSKT Compact that, in my opinion, hasn’t received enough attention is the impact and cost to the statewide water adjudication. If the Compact is rejected, this impact will be felt by individual water right holders as well as all citizens through their taxes.

The CSKT Compact is now in front of the 2015 Legislature. I hope that each of you takes the time to become fully informed on what the compact includes and what the impacts are to all Montana citizens if the Compact is not passed.

If the CSKT Compact fails and the CSKT are required, by our laws, to file and litigate their claims in the statewide water adjudication, the impact will be very significant. My concerns are outlined below:
The impact to Montana’s General Fund of having to fund the adjudication for decades into the future. Exactly how much this will cost is largely unknown but based on historical funding requirements will likely exceed $73 Million. That is on the backs of all Montana taxpayers.
The water that is available from Hungry Horse Reservoir, as a result of the Compact, is extremely critical in the Clark Fork Basin. The Clark Fork has been closed to new surface water appropriations for a number of years. With the 90,000 ac ft. that will available as a result of the Compact there will now be a significant opportunity for economic development. Legislators, such as Verdell Jackson, and the State have tried for many years to acquire Hungry Horse water for use in Montana. Through the Compact this goal has finally been accomplished.
The costs to individual water right owners of having to go back to the Water Court to either object to a CSKT claim for instream flow or to respond to an objection by the CSKT to a state based claim filed by Montana’s water users. These legal costs will be significant and if the water right is owned by a corporation the corporation must be represented by an attorney.
The Endangered Species Act protection of Bull Trout could have chilling effects on Montana water use as far east as Billings. If the CSKT files and litigates their claims for instream flows it is likely that the flows required will be based on the amount necessary for Bull Trout. These claims will include tributaries as well as mainstem reaches.
Importantly, the CSKT filing and litigation of claims is more than an empty threat. Absent a compact, the tribe will file and litigate their claims. They are required to do so by Montana’s laws. It is simply shortsighted to think that the Tribe will not take action to protect their property interests.
The CSKT Compact is fair to water users both on and off the reservation. The Compact is clear in stating that no vested water rights can be taken. The Compact is clear that the Tribe’s off reservation in stream flow water rights cannot be changed to consumptive uses and the ownership of the right cannot be changed.

Legislators are often faced with difficult choices and decisions. However, to truly be a statesman or stateswoman, it is critical that you as Legislators be fully informed on the issue before you and that you make your decision based on the plain language of the Compact. The rhetoric should not, and in this case cannot, win the day. This issue is too important to base your vote on guidance from any other source than your own conscience. This is a good deal for Montana and I am hopeful that the 2015 Legislature recognizes the significant opportunity that lies before you.